The team of 17 lawyers and eight special agents from the state Department of Justice will pursue corporate fraud, scams and fraudulent lending practices, Atty. Gen. Kamala Harris says.

California Atty. Gen. Kamala Harris, saying that years of unscrupulous lending still haunts the state, is creating a 25-person task force to target mortgage fraud of any size — from small operations that preyed on troubled borrowers to corporations that sold risky loans as safe investments.

The team of 17 lawyers and eight special agents from the state Department of Justice will pursue three major areas, Harris said in an interview:

•Corporate fraud, including instances in which bundled mortgages were sold as securities to the state or its pension funds under false pretenses. Harris said her office plans to prosecute some cases under California's False Claims Act, which she described as "one of those very powerful tools that California uniquely has … to pursue, in essence, what are false claims that are submitted to the state."

•Scams, including instances in which consultants, lawyers and others took fees from people in foreclosure, saying they would help the homeowners get loan modifications or other remedies, but delivered nothing.

•Fraudulent lending practices, including deceptive marketing, failure to fully disclose loan terms and qualifying people for loans who couldn't afford the terms.

Harris said the mortgage fraud that ultimately led to the housing crash continues to be a drag on the state, causing huge losses in jobs, property values and state revenues.

"We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state," Harris said, referring to the decline in homeowner equity. "There is a direct connection" between mortgage fraud "and the issue that we are challenged with in terms of our state budget crisis."

Creation of the state's Mortgage Fraud Strike Force, which Harris will announce at a news conference Monday in Los Angeles with Mayor Antonio Villaraigosa, comes as other states turn up the heat on the lending industry.

New York Atty. Gen. Eric Schneiderman is seeking records from three major Wall Street banks as part of a broad investigation into the mortgage crisis. Also, a months-long investigation by all 50 state attorneys general into the foreclosure practices of the nation's five largest mortgage servicers is continuing.

Harris said her initiative was distinct from the multistate investigation because it would go after all aspects of the mortgage-lending business. Harris, formerly San Francisco's district attorney, made a campaign promise last year when running for attorney general that she would crack down on mortgage fraud.

Many Wall Street financial institutions — private equity firms, hedge funds and banks — bundled often poor-quality mortgage loans into securities during the boom years and sold them to major investors, including pension funds. That resulted in billions of dollars in losses when borrowers defaulted on the loans, triggering the financial crisis.

Harris said that although successful prosecutions of major players in the mortgage meltdown have been difficult, the severity of the crisis called for a tough-minded approach to mortgage fraud, one that could target executives of major financial institutions.

"If the evidence leads us there, no case will be too big or too small to pursue," Harris said. "There remain millions of people affected by the mortgage crisis."

Angelo R. Mozilo, whose Calabasas-based Countrywide Financial Corp. was a major underwriter of risky subprime loans, agreed to a $67.5-million civil settlement with federal regulators but was not prosecuted criminally, despite a nearly three-year investigation by the Justice Department. Countrywide was acquired by Bank of America Corp. in 2008.

Harris' office reached a $6.5-million settlement this year with Mozilo and another former executive of Countrywide who the state had accused of predatory lending. Consumer advocates decried that settlement as far too small to be meaningful.

"The burden of proof in a criminal case is very high," Los Angeles defense attorney Jan Handzlik said. "It would be necessary for the AG to prove beyond a reasonable doubt that the mortgage executives had knowledge of the fraud and acted with a criminal intent."

Handzlik added that such proof is difficult "when those executives are relying on the representation of numerous other institutions such as the ratings agencies, the lenders who gave out the mortgages in the first place, the insurance companies that backed these securities and so forth."

William K. Black, a University of Missouri-Kansas City law professor and an aggressive regulator of the savings and loan industry after its crisis in the 1980s, said the state prosecutors could be successful if they carefully chose their targets.

Black asserted that the federal government has the means to pursue these cases but hasn't shown the will.

"The success rate in the savings and loan cases, despite the fact that they were more complex … was 90%, and this was against the best criminal defense attorneys in America," Black said.